Gold prices advanced in Asian trade on Tuesday, building on recent gains as escalating geopolitical tensions in Syria and a selloff on Wall Street drove demand for the safe-haven metal.
Industrial Metals See Mixed Movement
Copper prices stabilized on Tuesday after significant gains driven by promises of additional stimulus from China, the world’s largest importer. However, the metal continued to recover from sharp losses sustained over the past two months.
Further upward movement in the metals market was capped by caution ahead of key economic indicators, with the U.S. dollar remaining steady ahead of Wednesday’s inflation data.
Spot gold rose 0.4% to $2,671.62 an ounce, while February gold futures increased 0.3% to $2,694.69 an ounce as of 23:30 ET (04:30 GMT).
Geopolitical Tensions Bolster Gold Demand
Gold surged approximately 1% on Monday following heightened geopolitical concerns in the Middle East. Over the weekend, rebel forces seized control of Damascus, ousting President Bashar al-Assad, who fled to Russia.
The regime change, backed by Sunni Islamic factions, could heighten tensions with Iran, while Israel launched military offensives against Syria. These developments raised fears of broader conflict in the region, prompting investors to flock to gold as a traditional safe-haven asset.
Adding to the demand for gold were sharp overnight losses on Wall Street, where major technology stocks retreated from recent highs.
Investors Await Key Economic Events
Market sentiment remains cautious as traders prepare for a series of important economic events. Central banks in Canada, the European Union, and Switzerland are set to announce interest rate decisions this week, with the Federal Reserve’s decision scheduled for next week.Other precious metals showed a more subdued performance compared to gold. Platinum futures dropped 0.4% to $944.85 an ounce, while silver futures held steady at $32.620 an ounce.
Copper Stabilizes After Stimulus-Driven Rally
Benchmark copper futures on the London Metal Exchange fell 0.3% to $9,211.00 per ton, while February copper futures declined 0.2% to $4.2542 per pound.
Both contracts had surged 1.5% on Monday following pledges by China’s top political body to ease monetary policy and introduce more targeted stimulus measures. These announcements fueled expectations of improved economic growth in China, which could drive higher demand for commodities.
China’s trade data also provided some optimism. While both exports and imports for November were weaker than expected, China’s copper imports surged to a one-month high.
Attention this week is now focused on China’s Central Economic Work Conference, which is set to begin on Wednesday.
